Envelope System?????
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  1. #1

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    Default Envelope System?????

    Hi, everyone.

    My question is this. I am a self employed hairdresser. I mostly deal with cash, or checks. No cc. My husband gets a weekly check , direct deposit. His checks go for all the major bills, truck, house, home equity loan, gas, elec., phone , cell phone, satellite, etc. My income goes for gas for 3 vehicles, groceries, beauty shop supplies, clothes, lunch money, and any thing extra. I do try to help out on bills whenever possible.

    When you do the envelope system, or even the snowball, how do u determine how to pay it? Do you deposit the money in the envelopes into checking,,pay cash, etc? I try to pay as many bills online, but I worry that any money that is in the check acct. that is available, sometimes if I am short on cash, I use it. I feel like I am frittering away our money.

    Do you all do the keeping track of your expenses? Is this what I need to do?


    Here are my expenses: I also just signed contracts for the cell , and satelitte so I can't get rid of them

    Mortgage $75,000/600.00
    Home equity$30,000/100.00 interest only, trying to pay more
    Insurance?174.00 3 vehicles
    Truck $24,000./ 518.00
    Satellite/54.00
    Cell/100.00 we have 5: my dd/s pay for their own, and my mom is also on this paying her own.
    Phone/35.00
    cc/400.00
    cc2/2400.00

  2. #2

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    sorry, i ran out of room.

    gas/52.00 budget plan
    elec/103.00 budget plan
    water heater/14.00 rent
    life ins/30.00


    I think that is it.

    I would need evevlopes for:
    gas
    food
    beauty shop supplies
    school extras
    vacation

    Anything else?

    Please help. I appreciate it

    Thanks
    Sheri
    Last edited by SheriH.; 05-15-2006 at 08:57 PM. Reason: didnt get finished

  3. #3
    Registered User PrairieRose's Avatar
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    Default

    Sheri I don't use the envelope system but I know there are members here that do. I hope they'll respond to that part of your question. As far as the snowball portion of it I can tell we did. We started with our smallest balance debt. I'd start with the cc's first. Get them paid off. If you're paying $100/mo. on those then when you're done paying them off, start adding that to your truck payment. When it's paid for, take that amount, plus the $100 and pay onto your home equitiy. When it's paid off, and it will be so amazingly fast, take that amount, adding the truck pmt. and the $100 from the credit card payment and add that to your home mortgage. In 3-5 years you can pay off everything if you're diligent and patient. Good luck and stay focused.

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    Super Moderator Darlene's Avatar
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    Great advice Lisa and want to wish you well Sheri. I don't use the envelope system so I can't add anything. Our money goes into the checking and bills are paid from there. Lisa's plan will have you knocking down debt like a pro.




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    Registered User MandiDawn's Avatar
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    I would need evevlopes for:
    gas
    food
    beauty shop supplies
    school extras
    vacation


    I would use envelopes for these things: Groceries, gas and beauty shop and personal money.
    I use actual envelpoes. Each pay day(every 2 weeks) I take out $300 and put $140 into my coupon book (I pay for all groceries with cash from this money) I put $60 into an evelope in my car to pay for gas for the next two weeks, and I put $50 in my wallet for this week, and $50 in another envelope for next week. THis $50 is my money for smokes, going out to eat, renting movies, getting my eyebrows waxed, ect. I only go to the ATM one a pay period (on payday) and I don't use my debit or CC for anything.
    For the vacation I would start a seperate bank account and deposit money in there regulary. Either so much per pay day, or maybe your tips every Sat, or whatever.
    Is school extra's something you can budget for? What do they entail? I'm not sure what this is, but it sounds like something you might want to use an evelope on . . .

    sorry I'm a little rushed at work, hope others can elaborate more. . .

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    Registered User frugalnana's Avatar
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    I used the envelope system when we first started. I had them divided, for gas, groceries, entertainment, medical copays, etc. Everything else stayed in checking to pay the regular bills. Each pay day. I took out what I had budgeted for each. I had a daytimer (I still carry it with me) In it I had holes bunched and to fit the daytimer. (I think some have the little plastic zip ones in them now) But I put the money in it. Once it was gone, then I knew I couldn't use anything else. I had to wait. So it made me be very wise when shopping. We pretty much have things down now. I still use the system for groceries and little things I might be saving for.
    What Lisa said is correct, start with the smallest and then once paid off take that amount and apply it to the next and so on.
    I wish you luck.

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    We have been using the envelope system for about 6 months--works super for us! (cash is soooooo much harder to let go of than using those little plastic cards) I used to walk out of the grocery store with no idea how much I had spent! Same at Target, Walmart, Sams, etc. We were out of control, and were not really "spending" on frivolous things, just not paying attention.

    We started the Envelope system in Jan or Feb. Every week I go to the credit union, and get out cash--paychecks go into checking for paying bills, and gas money. I divvy out money for kids "commissions", school expenses, car expenses, pets, home expenses, groceries, and personal "blow" money. That money is to last two weeks. If there is left-over, at this time, we are leaving in the evelope for a time when there is a higher expense.

    The secret for us is NO DEBIT CARD USE, PERIOD, except for gasoline purchase--I even asked the bank for those little paper sleeves for the debit cards, and wrote GAS ONLY on them. With no debit card purchases, it is amazing how far the money goes...We have had some hiccups, but overall is going really well.

    Good luck to you, it is worth the effort!

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